Which one of the following is an example of unsystematic risk?
A)The federal government lowers income taxes.
B)The inflation rate increases unexpectedly.
C)The GDP rises by 2% more than anticipated.
D)Interest rates decline by one-half of one percent.
E)An oil tanker runs aground and spills its cargo.

Question

Quizplus · Accepted Answer

Unsystematic risk, also known as specific risk, is unique to a particular security or industry and can be mitigated through diversification. An oil tanker running aground and spilling its cargo is an example of unsystematic risk as it affects primarily the specific company or companies involved in the incident, rather than the broader market. The other choices are examples of systematic risk that affect the market as a whole.

Which One of the Following Is an Example of Unsystematic